iStockphoto/Thinkstock(WASHINGTON) -- A new government report charts an alarming rise in tax return refund identity thefts and finds that few of the thefts are even investigated by the Internal Revenue Service (IRS).

The U.S. Government Accountability Office (GAO) report said the IRS identified 641,690 incidents of identity theft involving tax fraud this year as of Sept. 30. That is an increase of 62 percent from the 232,142 incidents reported in 2011.

Just 0.1 percent of these cases initiated criminal investigations and the rest of the crooks were able to keep the ill-gotten gains. Only 898 criminal investigations were initiated in fiscal 2012, the report said.

"Notwithstanding the IRS's efforts, its resources and ability to resolve cases are stretched thin," according to the Taxpayer Advocate Service's 2011 annual report to Congress.

Beth Tucker, IRS Deputy Commissioner for Operations Support, testified in front of the House Committee on Oversight Thursday, saying, "The IRS is working to speed up and further streamline identity theft case resolution so that innocent taxpayers will experience as little inconvenience as possible."

The dollar volume of fraudulent refunds is not known, according to the GAO. Financial institutions recognized and returned to the IRS $754 million in tax refunds they found suspicious between January and Sept. 30, 2012. The GAO said that figure is only a fraction of the total amount of refund fraud.

James White, a spokesman for the GAO, said the nearly 642,000 cases included many attempts by individuals or groups of criminals, but the IRS does not know how many individuals are responsible.

Thieves can obtain a taxpayer's name, and Social Security number in many ways, including hacking into a computer system or stealing paper files at one of the many organizations that use names and Social Security numbers in their records, including employers, schools and financial firms. They then file a fraudulent tax return seeking a refund, often early in tax filing season before the real taxpayer files.

IRS officials said that "one of the challenges they face in combating this type of fraud is its changing nature and how it is concealed," the GAO report stated.

"While perfect knowledge about cases and who is committing the crime will never be attained, the better IRS understands the problem, the better it can respond and the better Congress can oversee IRS's efforts," the report continued.

The IRS has said it is pursuing ways to detect, resolve and prevent identity theft-based refund fraud, including a new filtering process that analyzes tax return characteristics. On its website, the agency offers tips for those who believe their tax records have been affected by identity theft and how to prevent it:

Don't carry your Social Security card or any documents with your SSN on it.

Don't give a business your Social Security number just because it asks.